Wednesday, August 31, 2005

The state of our educational system is costing us jobs and investment

Manufacturing Journal (http://manufacturingjournal.blogspot.com) pointed out this article "Toyota to build 100,000 vehicles per year in Woodstock, Ont., starting 2008 " at http://www.cbc.ca/cp/business/050630/b0630102.html. It says Toyota choose Ontario for the plant over US states willing to offer twice as much in incentives because the work-force is better educated, and they've had bad experiences trying to train under-educated American workers.

This article is a great and painful example of the importance of education. One person in the article is quoted as saying: "The educational level and the skill level of the people down there [Mississippi and Alabama] is so much lower than it is in Ontario." This echoes what was said at a Univ of California panel back in January: “The big difference between Europe and America is the proportion of people who come out of the system really not being functional for any serious role. In Finland that is maybe two or three percent. For Europe in general maybe fifteen or twenty. For the United States at least thirty percent, maybe more. In spite of all the press, Americans don’t really get the education difference. They generally still feel this is a well-educated country and work force. They just don’t see how far the country is falling behind.”

This is not a new view, and it is supported by research. In 1998, the World Bank's annual report said: "Education is one of the best investments, outstripping the returns from many investments in physical capital. Indeed, ... the total stock of human capital worldwide has higher value, by far, in terms of its contribution to production, than the stock of physical capital." The Economist reported last year on this study of 14 developed nations showing that investment in basic education had a direct and positive impact on economic growth. (http://aix1.uottawa.ca/~scoulomb/pages/Coulombe-Tremblay-UOWP0407E.pdf)

As with so many critical issues that face us as Americans, we've been sucked into a politics of divisive "moral" choices (e.g., vouchers & charters, religion in schools, inequity of property taxes) while the problems fester and grow. American education is 15th-20th in the world and slipping, and this article is an example of how it's costing us jobs and wage growth as well as civic solidarity and peace.

(By the way, the other 21st century infrastructure investment - health care - was also implicated in the Toyota move: Canadian workers are $4 or $5 cheaper per hour because of their health care system.)